Arbitration in France - Complete Legal Advice for Foreigners
Arbitration Court in FranceUpdated on Friday 03rd December 2021
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Arbitration in France is a common dispute resolution method that has become the preferred mechanism for solving national and international disputes. The French Arbitration Law encourages arbitration and Paris is home to the International Court of Arbitration, an important institution that is part of the International Chamber of Commerce. The International Court of Arbitration brings together more than 100 members from approximately 90 countries worldwide. The International Court of Arbitration in Paris is one of the most experienced and endowed arbitration institutions in the world. Our French law firm offers various legal services, including counseling and representation for solving legal matters.
The International Court of Arbitration
The head office of the ICC International Court of Arbitration is located in Paris, France, but the entity also has offices in other cities like: New York, Hong Kong or Singapore. However, the arbitration proceedings are administrated depending on the parties’ choice and this can be done anywhere in the world. Usually, the location is selected prior to the beginning of the dispute.
It is very important to acknowledge that the Court is not an actual juridical court and it does not resolve disputes, does not award damage or costs and does not decide the winner nor loser of arbitration. Independent arbitral tribunals take these actions.
The Court has specific functions, like:
- establishing the place of arbitration;
- confirming, appointing and replacing arbitrations;
- deciding to file for subsequent arbitrations;
- monitoring the arbitral process to make sure that it complies with the rules.
Arbitration in France
There are different requirements for domestic and international arbitration in France. In case of domestic arbitration, an arbitration agreement must be concluded in writing. This can also be an arbitration clause included in an already existing contract. The agreement must define the subject of the dispute. Also, the parties have the option to select unilateral or optional clauses. This means that one party, but not the other, will have the right to choose between the preferred methods for solving the dispute: either arbitration or court adjudications.
In international arbitration cases, the agreements are not subject to any formal requirements. The original arbitration agreement or a copy thereof must be provided when settling a dispute through arbitration in France.
The number of arbitrators needed to solve a case can be determined by the parties and included in the arbitration agreement. The French Arbitration Court does not impose a default number of arbitrators, if the parties have not specified this in their agreement. Accordingly, the task of appointing the designated arbitrators falls in the competence of the parties. If they fail to reach an agreement, a judge will appoint the arbitrator.
Facts about international arbitration in France
According to French Arbitration Law and more precisely Article 1504 of the Code of Civil Procedure or CPC, in the case of commercial interests where a dispute has arisen, international arbitration may come into question. Specifically, foreign companies that need reconciliation methods may benefit from international arbitration. Thus, international arbitration can take place before the French court, either with French or other parties involved in the respective procedures for resolving commercial disputes. Moreover, the arbitral award will be the same as the international award, even if the dispute has been settled in France. There are a series of legal aspects about international arbitration that can be discussed with our French lawyers.
Details of the arbitration agreement, by French Arbitration Law
An arbitration agreement is an important document that specifies the conditions under which a commercial dispute can be resolved, either domestic or international. According to French Arbitration Law, an agreement can have legal value without being transcribed. In other words, the solutions offered by one or more arbitrators before the parties involved in the respective dispute are valid without the need for a writing arbitration agreement.
Although this solution is possible, it is recommended to transcribe an arbitration agreement that mentions the award and that is presented to the parties involved in the resolved dispute. You can find out more about arbitration agreements from our lawyers in France. They have experience in arbitration cases and can represent your interests if the company you own is involved in a domestic or international commercial dispute.
Advantages and disadvantages of arbitration in France
There are several advantages and disadvantages to arbitration in France, a private process that is based on consent. For example, arbitration is known to be completely confidential and autonomous, ensuring fairness and impartiality with neutrality. Another advantage is the fact that the parties involved in the arbitration process can choose the arbitrators for resolving the respective dispute, relying on their experience.
It is important to note that an arbitral award is final and binding, except where there is a possibility that the decision may be challenged.
As for disadvantages, the arbitration process can cost more money and can last for a longer period, compared to disputes settled in court. This is where the costs for specialists and referees, among others, come into play. However, the laws are clear, and the arbitrators' decision takes effect immediately.
Some information about arbitrators
In resolving a dispute with the help of arbitration, one or more arbitrators may deal with the case brought to their attention. According to the Code of Civil Procedure in France and the French Arbitration Law, judges cannot be arbitrators in a dispute, except the issues to be resolved in the case of journalists or employment disputes. Here is some other information about arbitrators in France:
- There are no restrictions on the nationality or license of arbitrators operating in France.
- They must be impartial and independent in order to offer the best solutions.
- However, the arbitrators are obliged to disclose any occurrence that could affect the impartiality in case of a dispute between two or more entities.
- Those in charge of administering the arbitration may appoint an arbitrator if the parties do not agree with the one appointed in the first phase.
Investments in France, profitable for foreigners who want consistent profits
France has always been on the list of foreign players interested in top business in an economically and financially stable country. The ease with which a company can be set up, the experienced and multilingual workforce, the much-simplified bureaucracy, the multitude of business options in most industries, and access to international markets are some of the advantages of France's business climate. Here are some interesting statistics that show in broad terms the economic direction of the country:
- The total FDI in France in 2020 was about USD 968 billion.
- In the same year, over 29% of foreign investments were absorbed by the manufacturing sector in France, while about 26% were directed to financial and insurance services.
- France ranked 32nd out of 190 world economies in terms of business conditions, according to the 2020 Doing Business report.
- Paris is the most important business center in France. The capital hosts a large number of foreign businesses that enjoy extremely advantageous business conditions.
If you need more information about arbitration in France or if you are a business owner in France interested in solving a commercial dispute, you may contact our French lawyers. We can legally represent you or your company.